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Title: “Arbitration As An Alternative To Business Litigation”
Guest: Mark Furman – Tarlow Breed Hart & Rodgers
Interviewer: Jonathan Freedman – MAGE LLC

Click here to read the transcript

Jonathan (0s):
Welcome back to Radio Entrepreneurs. I’m Jonathan Freedman and our next guest up is Mark Furman of Tarlow Breed Hart Rodgers. Welcome Mark.

Mark (7s):
Hi, Jonathan. Great to be with you

Jonathan (10s):
Always great to be with you on this wonderful morning. You want to talk about alternatives to litigation of there are several, but one of the more common one is

Mark (21s):
Arbitration. So we were talking recently about, you know, terms and conditions, you know, what’s what you have in your contracts. But one of the things you want to think about is whether you want to require arbitration of disputes instead of litigation. So there are advantages and disadvantages to arbitration, but in general, if you have an agreement that provides for arbitration, it’s legally enforceable, and it can offer a much faster way to resolve disputes. That’s generally true.

Mark (1m 1s):
I’ve had cases where there are exceptions, but you have to think about, you know, where the arbitration is going to be, what law is going to apply to the arbitration. Are we talking about California, Illinois, Massachusetts, exactly. Where, because the law does vary from state to state, you know, right now almost everything is being done by zoom, but that could change. And when it does, the locale is really important. I going to use a, a company that does arbitrations as a, because if you are, they have a set of rules that apply to the Robyn titrations and there are different, there are different companies, for example, jams does it all over the country.

Mark (2m 1s):
The American arbitration association has arbitration programs and they each have different sets of rules that are gonna dictate how it works, how many arbitrators they’re going to be, depending on the amount in controversy. And that matters because unlike courts where judges are paid by the state. So there is not a cost. The arbitration companies, you know, require fees and you pay for the arbitrators. So you’re both paying for the arbitrator and you’re paying some administrative filing type fees.

Mark (2m 45s):
So it can be more expensive, but you also have the potential for a very quick results. So not long ago, you know, there was a case that I was representing party, where from the time the arbitration was filed to the decision by the arbitrator, it was less than 90 days. So if you compare that to a court, a civil case in court is really hard to get anything decided in the first year.

Mark (3m 31s):
And in many cases, the first two years or three years, and with COVID, you know, civil cases are secondary to criminal cases. So speed is a huge thing. Now that,

Jonathan (3m 44s):
So Mark, you gave us a lot to unpack. I’m going to stop you for one second, because you talked about Arbitration typically is binding. In other words, the decision of the arbitrator is legally binding for the parties. And you agree to that upfront, but you talked about speed being a key component here that people can move through to a decision in a rapid. Is that because of backlog existing in traditional litigation, or is it just the process of litigation, which tends to, to elongate things? So in a, in a normal world, is it apples to apples in terms of timeframe or is it always much more rapid? In the case of arbitration are typically much more rapid than, than litigate

Mark (4m 27s):
In my experience, it’s more rapid than litigation except in the rear case and litigation that it somehow gets accelerated. You know, that’s very unusual and it does happen. I, in fact, I once tried a case that actually went to trial within a couple of weeks of it being filed, but that’s a one in a million situation in terms of apples to apples, arbitration is generally going to be much quicker. And I think that’s particularly true, the fewer scheduling problems that there are, you know, if you have one arbitrator versus three arbitrators, you get, you only get into one arbitrator scheduling conflicts.

Mark (5m 22s):
So I once did have a 20 day arbitration that the actual hearings took six months because of everybody’s schedule. No, that was, you know, a case that involved a lot of parties and witnesses, but in general, one arbitrator

Jonathan (5m 44s):
Is the process typically truncated versus litigation and two in terms of discovery in terms of all of those, or is it just the timeframe is compressed, but you still go through the same stages.

Mark (5m 54s):
It’s, it’s much more truncated. There’s no right to depositions. You know, there’s typically an exchange of documents and, and you know, you from the beginning are trying to schedule the hearing. So I think it’s harder for parties to delay. You know, some parties may be inclined to want to delay, but I think it’s hard at a delay for one because the job of the arbitrator is to really move the thing along. And the arbitrator has been hired to resolve that case as opposed to a judge who may have responsibilities for hundreds and hundreds and hundreds of cases.

Mark (6m 48s):
So, you know, some of the types of motions that can delay cases and litigation motions to dismiss motions for summary judgment, those are seldom things that delay traditions from going forward. And the fact that you made the point that it’s binding, you know, if you’re going to agree to Harbor titration in general, it’s binding, which means that even if the arbitrator gets it wrong on the law or on the facts everybody’s stuck with in the absence of, you know, some kind of real enormous misconduct or fraud or payoff or something that would be quite unusual.

Mark (7m 38s):
So it’s typically you’re stuck with it. Now, there have been arbitration agreements that people have made that change that. So one example of a potential arbitration agreement is you you’ll, for example, say the arbitrator will decide the facts and it’s binding those can’t be revisited, but somebody could ask a judge to review the law, whether the arbitrator applied the law correctly to the facts that he or she found. So that’s a little bit of it’s arbitration that gives you speed on the facts, but yet preserves the parties right of appeal in the event, they don’t get the law, right.

Mark (8m 32s):
What happens in that instance? Is it a third party that gets called in so to speak, or who’s independent now you gonna provide, you provide for by agreement that a court may review the legal, legal decisions of the arbitrator. Now also in arbitration, you can provide for, you know, detailed findings by the arbitrator of the facts in the law, or parties can dispense with that and say, just tell us who wins. And what’s, you know, no findings, no nothing. Obviously the more money that’s involved, you want to, you know, consider whether you want to test the arbitrator.

Mark (9m 19s):
If it’s something that a party views as extreme, but to get to a finish line on what the facts are in a matter of months, rather than years, there’s a lot of savings, a lot of savings on discovery motions for summary judgment motions to dismiss motion, discovery motions. So people find, I think that Arbitration can save money, even though they’re paying for the arbitrator and the other fees.

Jonathan (9m 51s):
Well, it’s interesting. You mentioned that it sounds like potentially the cost is a, if not a comparable cost and perhaps a little bit less it’s in a much more condensed timeframe. So from a cashflow perspective, it may be a costly proposition because it’s all happening in a shorter timeframe, but you’re saving your time. You’re saving yourself time and longevity in terms of, you know, be mired in an illegal process, which has a cost associated with it as well.

Mark (10m 15s):
Well, emotional as well as economic. Yeah,

Jonathan (10m 19s):
Absolutely. And, and, you know, in terms of Savannah, right, and in terms of bandwidth, right? But oftentimes when people are caught in litigation in a corporate environment, you know, it can, it’s all, it can be all consuming. And so, you know, it takes a long time.

Mark (10m 33s):
Another thing that happens is it compresses. Sometimes people settle cases at the 11th hour. So what an arbitration hearing does, it, it gives the parties that opportunity to evaluate their risks and think about whether they want to settle the case. So if you could imagine settling a case in a couple of months, as opposed to thinking about settling the case in a few years, that can be a benefit too,

Jonathan (11m 5s):
Right? And, and that, as you pointed out that emotional roller coaster that goes along with being mired in litigation for three years or five years or whatever that timeframe is. But also, you know, the fact that it is time consuming and, and brain brain cell consuming, You can attest as you can attest Mark Furman of Tarlow Breed Hart. Roger’s always good stuff. A lot to unpack in a short time. People want to get in touch with you want to talk further about Arbitration, how to avoid litigation, how to not get mired in, in litigation, but the arbitrary to settle things, to move their legal challenges board, what’s the best way for them to reach out to you.

Mark (11m 49s):
I can be reached at 6 1 7 2 1 8 2 0 2 5 or M Ferman, F U R M a

Jonathan (12m 3s):
Mark Furman, director of Tarlow Breed Hart. And Roger’s always a pleasure to have you on Radio Entrepreneurs. And we’ll be right back with another segment on Radio Entrepreneurs.

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